The Rajasthan High Court (Jaipur Bench) has held that extension under Section 29A of the Arbitration and Conciliation Act, 1996 is not mechanical, must rest on “sufficient cause,” and may be accompanied by terms including fee reduction or cost consequences where delay is attributable to the arbitral tribunal. The Court also reaffirmed that arbitration is intended to secure speedy and effective justice, especially in commercial disputes.
Since the present order is essentially an interim procedural order issuing directions for service, tagging, listing and filing of reply, its precedential value is limited to the Court’s prima facie observations on the purpose of Section 29A and the need to avoid undue procedural prolongation of arbitral proceedings.
A Single Judge Bench of Justice Sameer Jain observed that that the object of the Arbitration and Conciliation Act, 1996, particularly in commercial matters where parties have chosen alternate dispute resolution, is speedy and effective justice. The Bench expressed “profound consternation” at the fact that despite heavy expenditure over the years, the dispute remained undecided and the substantive merits had become bogged down by procedural extensions of time.
The Bench reproduced Section 29A and specifically noticed that extension of time by the Court may be granted only for “sufficient cause” and on such terms and conditions as may be imposed, and that where delay is attributable to the arbitral tribunal, reduction of arbitral fees may be ordered. The Bench also extracted the passage from Rohan Builders vs. Berger Paints India Ltd. [2024 INSC 686], emphasizing that extension is not to be granted mechanically and that judicial discretion under Section 29A(5) acts as a safeguard against abuse of process.
At this stage, the Bench did not finally decide the validity of the extension order. Instead, noting appearance through caveat, it directed fresh service of the petition and relevant documents on the respondent’s counsel, ordered tagging of the matter with another petition involving the identical lis, and listed the matter for April 22, 2026, while directing reply to be filed in the meantime.
Briefly, the petitions challenged an order dated February 24, 2026 passed by Commercial Court, by which the mandate of the arbitral tribunal was extended from April 30, 2025 to September 30, 2026. The petition also sought, in the alternative, modification of the impugned order by directing that for the period beyond April 30, 2025, the respondent should bear the full additional arbitral fees, no further interest should accrue in favour of the petitioner, and such other cost-related conditions be imposed in line with Sections 29A(5), 29A(8), 31(8) and 31A of the Arbitration and Conciliation Act, 1996.
The dispute arose from a composite arbitral reference relating to Restructured Accelerated Power
Development and Reforms Programme (RAPDRP) works awarded in 2009 to HCL Infosys Limited for installation of SDCT/data centres and smart metering infrastructure in Rajasthan, involving about Rs. 528.19 crores across 87 RAPDRP towns and 534 non-RAPDRP locations. The arbitral tribunal, consisting of retired judges of the Supreme Court and various High Courts, was constituted in 2020. During the proceedings, one tribunal member died and another member had to be appointed for medical reasons. The petitioners submitted that approximately Rs. 14.5 crores had already been incurred towards arbitral fees, that about 162 sessions had been held, and that only 80 sessions were conclusive and fruitful.
The petitioners argued that repeated extensions had been granted without sufficient cause under Section 29A of the 1996 Act, contrary to the statutory objective of expeditious dispute resolution. It was also contended that the Commercial Court ignored the continuing financial burden on the public DISCOMs arising from prolonged arbitral fees, blocked performance bank guarantees and ongoing carrying costs, contrary to Sections 31(8) and 31A of the Act.
Appearances:
Advocates Kartik Seth and Shilpa Saini, for the Petitioner
Senior Advocate R.N. Mathur, along with Advocates Shailesh Kapoor, Sakshi Chaturvedi, Lokesh Kumar Atrey, and Arif Jamal, for the Respondent
